Weathering the storm: Alternatives to redundancy during a crisis

The COVID-19 pandemic is placing existential pressure on many businesses, consequently impacting almost every industry in some shape or form. It is forcing many businesses to think more dynamically and creatively than ever before, as they strive to support their employees, many of whom are facing job uncertainty.

No business is immune to a situation like this, and difficult decisions may need to be made. However, there are several measures employers could implement to avoid potentially lengthy formal redundancy procedures and to retain staff in the immediate future whilst putting measures in place to assure business continuity once operations resume. Here we identify a few alternative considerations:

The Government’s Job Retention Scheme

Under the Coronavirus Job Retention Scheme (CJRS), all UK employers are able to claim back 80% of an employee’s salary, up to a cap of £2500. CJRS is intended to tackle the potential economic damage caused by the coronavirus and support employers in retaining their workforce. With the scheme in place till 30 June 2020, this continuing support provides an alternative to redundancy and any employer contemplating redundancies whilst the scheme is in place will need to be able to demonstrate why redundancies are necessary when furlough is available

This could be in conjunction with a proportionate reduction in hours or otherwise to aid cost cutting, although employers are encouraged to consider the practicalities of this and critically such a reduction will not be possible without the express written agreement of the employee. Agreeing flexible working patterns is also worth exploring; many employees may still have childcare responsibilities as a result of continued school closures and may be keen to undertake different working arrangements. Within such agreements you should ensure as the employer you retain the right to terminate such arrangements.

Contractual annual leave allowance

Assuming appropriate notice is provided, most employers can require employees to take contractual annual leave allowance. The notice required to do so must be double the period of leave (eg. 10 days’ notice to enforce a 5 working day leave). This option offers a way of forward planning and ensuring sufficient staffing levels once business operations resume. It is also one that may be exercised whilst employees are still furloughed, however employers must pay 100% of their pay during any annual leave.

Consider asking staff to take a period of unpaid leave

Although typically granted to an employee for means of study or travel, and with travel opportunities not available in the current climate, there may be a reluctance from employees to volunteer for this kind of arrangement. However, there may be those with children or care responsibilities who are willing to contemplate temporarily stepping away from their role.

Of course, these measures are by no means prescriptive nor suitable for every business, and the legal and commercial implications need to be carefully considered before any decisions are made.

Redundancies may be inevitable for some businesses, in which case correct and fair procedures must be followed, however it is important to consider alternative methods as part of any fair process.

Open and transparent communication with employees is key so that they understand the wider business and financial implications of your decisions.

If you have any questions regarding any of the topics discussed, are considering steps to implement such procedures, or you need support navigating sensitive HR matters as a result of the COVID-19 pandemic, please do not hesitate to get in touch with HR Services Director​ Vivienne Tolley. Advising both large and small businesses, Vivienne provides expert HR consultancy and solutions to clients that is both pragmatic and commercially astute, whilst delivered in a timely manner.